OPTIONS MEETING INTRODUCTIONS Board Members Ron Stratton Patrick - - PowerPoint PPT Presentation

OPTIONS MEETING

INTRODUCTIONS

Board Members Ron Stratton Patrick Laury John Nuttall Bruce Portillo Ruth Hatcher David Brandenburg Jim Abrahamson (Valley Task Force Chair) Joshua Hart David Whelchel (Valley Task Force) Valley Task Force Tom Judson, General Manager Mike Taggart, Director of Maintenance & Construction Keith Ihms, Director of Golf Maintenance.

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INTRODUCTORY STATEMENT

• The Board of Directors is considering all options.
• The Board of Directors has not made any decisions regarding the future of the valley

courses.

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PLEASE HOLD YOUR QUESTIONS

• There will be a question and answer section at the end of this
• presentation. Please hold your questions until the end.
• There is a good chance that your questions will get answered during

the presentation.

• This presentation, and other important information, is available on

the POA’s website. www.bellavistapoa.com/valley-flood-study/

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COMMITMENTS

• The Board’s continued vision is to maintain the beauty and enjoyment of our “front

yard”, which is the Little Sugar Creek Valley.

• The Board’s continued mission is to provide attractive recreational amenities,

including golf, for the use and enjoyment of our membership.

• It is the Board’s responsibility to find the most economically feasible and practical

strategies to accomplish this.

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COUNTRY CLUB AS A PRIORITY

• Flood mitigation efforts for the Country Club (our flagship facility).
• More practical and feasible compared with Kingswood and/or Berksdale.
• Substantial investments already made to the golf course.
• Pump station
• Irrigation upgrades
• New green
• Bunkers
• Low water crossing currently underway

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QUICK RECAP

QUICK RECAP

• Over the last 10 years, Bella Vista has experienced flooding in 2008, 2011,

2013, 2015, and 2017. (slide 16 from the last presentation)

• Clean up and repairs from these many floods has cost the POA $2,122,651.

Flood expense for just the Valley was $1,343,000.

• Country Club

$793,000 (pump station, irrigation upgrade, new green)

• Kingswood

$312,000

• Berksdale

$238,000

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QUICK RECAP - CONTINUED

• It will cost approximately $3,765,000 to stabilize the streambanks spread

along all three courses and replace the five “flat” bridges.

• Bridge replacement:

$2,040,000 (slide 16)

• Berksdale (4 bridges)

$1,614,000

• Kingswood (1 bridge)

$426,000

• Country Club

zero

• Streambank stabilization (LPSTP & Gabion Walls): $1,725,000 (slide 37)
• Berksdale

$663,000

• Kingswood

$560,000

• Country Club

$502,000

• Estimated time to complete the engineering, permitting, and construction

for the above projects is 18 to 24 months.

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QUICK RECAP - CONTINUED

• The findings of the hydrology study determined that there is no way to

prevent Little Sugar Creek from flooding. (slide 7)

• As land in the watershed upstream continues to get urbanized, the

frequency and intensity of flooding in the valley will increase. (slides 8-10)

• Berksdale sustains the most damage of the three courses because it is the

first to get hit by the flood water and the Creek bends the most.

• 36 out of 54 greens are under the level for 10 year flooding. It would be

almost impossible to get the permits necessary to raise all of these greens, aside from the enormous cost in undertaking such a project. Raising the greens would also change the playability and character of these courses.

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WWW.BELLAVISTAPOA.COM/VALLEY-FLOOD-STUDY/

FINANCIAL FACTS

REVENUE BY CATEGORY – 2018 BUDGET

$8,337,000 $4,891,000 $1,915,000 $1,650,000 $594,000 $717,000

Assessments Golf F&B Recreation Lot Sales & Transfer Fees All Other Information available on website TJ

NET INCOME/(LOSS) BEFORE DEPRECIATION – 2018 BUDGET

$(3,000,000) $(2,000,000) $(1,000,000) $- $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000 $7,000,000 Golf F&B Recreation MAC Marketing Assessments & Administration

THE POA IS BUDGETED TO BREAK EVEN FOR 2018. ASSESSMENTS OFFSET THE DEPARTMENTAL LOSSES.

Information available on website GOLF OTHER MAC REC & LAKES F&B MARKETING TJ

GOLF – NET LOSS PRIOR TO ASSESSMENT SUBSIDY

$(2,500,000) $(2,000,000) $(1,500,000) $(1,000,000) $(500,000) $- 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

$367,000 Average annual assessment support per course.

($2.2) Million

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CAPITAL PROJECTS 2012 TO 2017

$4,201,000 $7,325,000

GOLF ALL OTHER TJ

COMBINED TOTAL ROUNDS PLAYED

• 50,000

100,000 150,000 200,000 250,000

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

No floods, mild winter, no closure of courses due to construction. Flood year Flood year

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ROUNDS OF GOLF BY COURSE

10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Country Club Highlands Kingswood& Berksdale Metfield Scotsdale Flood & reduction to 9-holes Course construction Course construction

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FORECASTED ROUNDS – NEXT FIVE YEARS

• 20,000

40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000 200,000

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

1.Enhancement of facilities. 2.Effective marketing efforts. 3.Player development. 4.Growth of guest rounds.

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OUR ONLY 36-HOLE FACILITY

• In 2017, the POA held five 36-hole events.
• Three out of these five events were for charities and were priced at a discount.
• The POA has not lost any 36-hole events from 2016 to 2018. The customers would

have preferred a central location, but none of them canceled their event.

• Where else will they play?

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BIG PICTURE QUESTIONS

THE BIG QUESTIONS

• Is it economically and practically feasible to maintain the Country Club as a golf course?
• Is it economically and practically feasible to maintain Kingswood as a golf course?
• Is it economically and practically feasible to maintain Berksdale as golf course?
• For each of the above:
• If yes, how much will it cost and how do we fund it?
• If not, what is the most attractive and feasible alternative use of the land?
• How many golf courses should we have?
• How will these decisions impact the long-term success of Bella Vista?

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REVERSIONARY CLAUSE MYTH

• There is no reversionary clause on any of the Valley courses. In other words, the

POA controls the land and can repurpose it, provided the land is used for recreation.

• Cooper does hold a deed restriction on the land, which could require approval or

partnership with Cooper for the land to be used for commercial purposes.

• Many of the churches in the POA do have reversionary clauses attached to the church
• land. It is possible that this myth about the POA land is born out of the churches’

reversionary clauses.

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ECONOMIC REALITIES

COUNTRY CLUB

• Substantial investments have already been made:
• Pump station

$181,000

• New green (new #17)

$59,500

• Irrigation upgrade

$140,000

• Bunker upgrade

$166,100

• Low water crossing from new #10 to #11

$50,000

• Total completed (or almost completed)

$596,600

• Remaining work that still needs to be done:
• Streambank stabilization

$502,000

• Raising of select greens (est. six greens)

$750,000

• Total remaining

$1,252,000

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Berksdale Note: No inflation factor included Expense (+000) Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr 10 Total Assessment Supplement $367 $367 $367 $367 $367 $367 $367 $367 $367 $367 $3,670 Bridges $406 $406 $377 $426 $1,615 Streambanks $663 $663 Basic Capital projects $500 $500 Total $1,436 $773 $744 $1,293 $367 $367 $367 $367 $367 $367 $6,448 Flood clean up/repair/loss ? ? ? ? ? ? ? ? ? ? ?

Kingswood Note: No inflation factor included Expense (+000) Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr 10 Total Assessment Supplement $367 $367 $367 $367 $367 $367 $367 $367 $367 $367 $3,670 Bridges $426 $426 Streambanks $560 $560 Basic Capital projects $500 $500 Total $1,353 $867 $367 $367 $367 $367 $367 $367 $367 $367 $5,156 Flood clean up/repair/loss ? ? ? ? ? ? ? ? ? ? ?

Berksdale & Kingswood Note: No inflation factor included Expense (+000) Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr 10 Total Assessment Supplement $734 $734 $734 $734 $734 $734 $734 $734 $734 $734 $7,340 Bridges $832 $406 $377 $426 $2,041 Streambanks $1,223 $1,223 Basic Capital projects $500 $500 $1,000 Total $2,789 $1,640 $1,111 $1,660 $734 $734 $734 $734 $734 $734 $11,604 Flood clean up/repair/loss ? ? ? ? ? ? ? ? ? ? ?

PROBABILITY OF A “MAJOR” FLOOD

10 YEAR EVENT

• Cumulative Binomial Probability Calculator
• 10 Year period
• 35% chance of no “Major” event
• 65% chance of one or more “Major” events
• 26% chance of more than one “Major” event
• As land in the watershed upstream continues to get urbanized, the frequency and

intensity of flooding in the valley will increase.

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ECONOMIC SUMMARY

• Since the flood of 2008, the annual “operating cost” (Net Loss), subsidized by

assessments, has been approximately $736,000 per year ($7+ million total) for Kingswood – Berksdale.

• Under the “best case” scenario, this cost will increase over the next 10 years (bridge

replacement, streambank stabilization, course modifications, etc.).

• Under the “worst case” scenario (“Major” flood event), our investments into the

Valley, past and future, could be washed away.

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POSSIBLE OPTIONS

OPTION #1 MAINTAIN KINGSWOOD AND BERKSDALE AS 18- HOLE COURSES

• Spend $11.6 million over 10 years and hope for no major flood.
• Issue: How will we pay for this?
• Higher golf fees?
• Assessment increase?
• Reality: Statistical likelihood of 10-year flood causing major loss.

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OPTION #2 CLOSE BOTH KINGSWOOD AND BERKSDALE

• Frees $11.6 million over the next 10 years, potentially redirected to:
• Flood mitigation efforts to sustain Country Club.
• Re-purposing Kingswood and Berksdale. Current costs unknown and undefined.
• Enhancing remaining golf courses.
• Building ARKMO golf course. (Bringing us to 5 courses)
• Pursue potential partnerships for the Valley:
• Approximately 22 of the 200 acres are above the 100 year flood plain, thus possible for

development.

• Razorback Greenway or other possible options with the Walton Family Foundation.
• Other potential partners?

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OPTION #3 – BERKSDALE AS 9-HOLES & KINGSWOOD AS 18-HOLES

• Savings compared to 36-hole facility (10-year period)

$2,600,000

• We will still need to spend over the next 10 years (27-holes)

$9,004,000

• Re-purpose 9-holes at Berksdale. Current costs unknown and undefined.

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OPTION #4 – CLOSE BERKSDALE & KEEP KINGSWOOD AS 18-HOLES

• Savings compared to 36-hole facility (10-year period)

$6,448,000

• We will still need to spend over the next 10 years (18-holes)

$5,156,000

• Re-purpose 18-holes at Berksdale. Current costs unknown and undefined.

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WHAT IS THE “RIGHT” NUMBER OF COURSES?

• Mathematically, we can accommodate our current level of play with four golf courses

(40,000 rounds per course).

• However:
• Our golfers would not have as much freedom to pick and choose when and where they

would like to play, compared with now.

• Four golf courses would limit our ability to grow golf and promote Bella Vista.
• Course conditions may deteriorate as a result of excessive play.
• Five courses maintains a good balance between accommodating our membership’s

needs, while not having the expense of under utilized golf courses.

• Five courses allows us room to grow rounds.

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ARKMO AS POTENTIAL FIFTH COURSE

• 366 Acres which is fully owned by the POA. Partially paid for by our golfers.
• Allows construction of golf course that will not flood ($6-$7 million construction

cost estimate).

• Sale of residential lots (plus commercial?) would offset some cost.
• 80 acres, 200 lots, times net $25k = $5 million potential? (rough first estimate)
• Lower running cost (Net Loss) for 1 golf course that does not flood vs 2 that do

flood.

• The land was originally purchased by the POA for a golf course.

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COMMITMENTS, RESTATED

• The Board’s continuing vision is to maintain the beauty and enjoyment of our “front

yard”, which is the Little Sugar Creek Valley.

• The Board’s continuing mission is to provide attractive recreational amenities,

including golf, for the use and enjoyment of our membership.

• It is the Board’s responsibility to find the most economically feasible and practical

strategies to accomplish this.

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POSSIBLE FUTURE OF SOUTH BERKSDALE

NEXT STEPS

• More detailed discussion among Board and Management.
• Input from property owners. What options do you feel are appropriate?
• Further discussions with potential partners.
• The Flood Study and this presentation are available on the POA’s website.

www.bellavistapoa.com/valley-flood-study/

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WE WANT YOUR FEEDBACK

• Send comments to floodstudy@bvvpoa.com

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PROPERTY OWNER COMMENTS

• Please keep your comments to no more than three minutes.

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